Published: Wednesday, July 31, 2013 at 4:53 p.m.

Last Modified: Wednesday, July 31, 2013 at 4:53 p.m.

Non-profit arts groups are expressing concerns about a new state tax on ticket sales, cover charges and season passes.

"This is just confusion waiting to happen," said Karen Wells, executive director of Arts North Carolina, a Raleigh-based advocacy organization for state arts groups.

Under a tax reform plan approved by North Carolina's General Assembly, beginning Jan. 1 the state will charge a 4.75 percent privilege tax on admission charges to any live performance or event, any movie screening, any museum, cultural site, garden, exhibit, art show or guided tour.

Gov. Pat McCrory signed the measure into law July 23.

Under House Bill 998, the new tax covers single ticket sales, multi-occasion tickets, or seasonal or annual passes. The law applies to both non-profit and for-profit enterprises and to museums and other attractions owned by local governments, such as Cape Fear Museum or Airlie Gardens.

Exempted from the ticket tax are elementary and secondary school events (though not those at colleges or universities), agricultural fairs and festivals, youth sports events sponsored by non-profit groups, state historic sites and a limited number of institutions receiving state support, such as the N.C. Museum of Art, the N.C. Museum of Natural Sciences and the North Carolina aquariums, including the one at Fort Fisher.

The tax will apply, however, to the Battleship North Carolina Memorial, according to Wells, since the state's battleship commission was set up as a self-supporting entity from the start.

"It's unclear how this will impact us," said Norman Bemelmans, cultural arts director for the University of North Carolina Wilmington, who oversees UNCW's 1,000-seat Kenan Auditorium and other venues on campus. "I just don't like the sound of it."

"It's not welcome, I can tell you that," said Tony Rivenbark, executive director for the Thalian Hall Center for the Performing Arts. "At this point, we don't know how it's going to be enforced."

North Carolina has long charged a 3 percent tax on gross receipts, including ticket sales, Wells noted. This tax dates back to an amusement tax enacted during the Great Depression.

"It basically dried up live theater in the state," Rivenbark said. "That was when the showboats stopped coming along the coast."

Over the years, however, most non-profits had been exempted from the gross receipts tax, Wells said. The new law, however, swept these exemptions away.

Commercial theaters and movie houses already pay the gross receipts tax, but the increase could hurt business, said Russ Nunley, vice president for marketing and communications for Regal Entertainment Group, which operates Wilmington's Mayfaire 16 Cinemas.

"Any time you talk about raising a tax on entertainment, there's going to be an impact," Nunley said.

If ticket prices go up, he added, more people might choose to stay home, cutting sales and leaving little or no new state revenue, he added.

"Any tax increases in these economic times will pose a hardship on working families," said Terry Bryant of the Museum of Coastal Carolina at Ocean Isle Beach. At this point, Bryant has no idea what impact the tax would have on her museum and its sister attraction, Ingram Planetarium at Sunset Beach.

Thalian Hall already pays state sales taxes on its food and beverage concessions and on souvenir sales, Rivenbark said.

"The overall thought was how we could raise money," said State Rep. Ted Davis, R-New Hanover. Davis voted for House Bill 998, which included the new tax, but said he is unfamiliar with its specific provisions.

"This was just an enormous piece of legislation with many, many sections," he said.

"The idea was to spread the tax base around," said Rep. Rick Catlin, R-New Hanover, who also voted for House Bill 998. Like Davis, he was not on any of the committees involved in the negotiations on the tax.

"At the end of the session, you're moving at the speed of light," he said. "If you're not on one of the committees, you're kind of out of the loop."

Rep. Suzi Hamilton, a Democrat who represents parts of New Hanover and Brunswick counties, voted against the bill. State senators Thom Goolsby of New Hanover and Bill Rabon of Brunswick, both Republicans, voted for the bill in the Senate.

The new tax law leaves a number of questions unanswered, Wells said. For example, would local sales taxes also be applied to tickets and passes, along with the state tax?

Wells expects the ticket tax might be revisited in the fall. Already, she said, some legislators are talking about "unintended consequences" of the act.

"It's not over," Wells said. "We expect there's going to be a lot of conversation about this."

<p>Non-profit arts groups are expressing concerns about a new state tax on ticket sales, cover charges and season passes.</p><p>"This is just confusion waiting to happen," said Karen Wells, executive director of Arts North Carolina, a Raleigh-based advocacy organization for state arts groups.</p><p>Under a tax reform plan approved by North Carolina's General Assembly, beginning Jan. 1 the state will charge a 4.75 percent privilege tax on admission charges to any live performance or event, any movie screening, any museum, cultural site, garden, exhibit, art show or guided tour.</p><p>Gov. Pat McCrory signed the measure into law July 23.</p><p>Under House Bill 998, the new tax covers single ticket sales, multi-occasion tickets, or seasonal or annual passes. The law applies to both non-profit and for-profit enterprises and to museums and other attractions owned by local governments, such as <a href="http://www.starnewsonline.com/section/TOPIC9959"><b>Cape Fear Museum</b></a> or <a href="http://www.starnewsonline.com/section/topic04"><b>Airlie Gardens</b></a>. </p><p>Exempted from the ticket tax are elementary and secondary school events (though not those at colleges or universities), agricultural fairs and festivals, youth sports events sponsored by non-profit groups, state historic sites and a limited number of institutions receiving state support, such as the N.C. Museum of Art, the N.C. Museum of Natural Sciences and the North Carolina aquariums, including the one at Fort Fisher.</p><p>The tax will apply, however, to the <a href="http://www.starnewsonline.com/section/topic33"><b>Battleship North Carolina</b></a> Memorial, according to Wells, since the state's battleship commission was set up as a self-supporting entity from the start.</p><p>"It's unclear how this will impact us," said Norman Bemelmans, cultural arts director for the University of North Carolina Wilmington, who oversees <a href="http://www.starnewsonline.com/section/topic71"><b>UNCW</b></a>'s 1,000-seat <a href="http://www.starnewsonline.com/section/topic9947"><b>Kenan Auditorium</b></a> and other venues on campus. "I just don't like the sound of it."</p><p>"It's not welcome, I can tell you that," said Tony Rivenbark, executive director for the <a href="http://www.starnewsonline.com/section/topic9941"><b>Thalian Hall</b></a> Center for the Performing Arts. "At this point, we don't know how it's going to be enforced."</p><p>North Carolina has long charged a 3 percent tax on gross receipts, including ticket sales, Wells noted. This tax dates back to an amusement tax enacted during the Great Depression. </p><p>"It basically dried up live theater in the state," Rivenbark said. "That was when the showboats stopped coming along the coast."</p><p>Over the years, however, most non-profits had been exempted from the gross receipts tax, Wells said. The new law, however, swept these exemptions away.</p><p>Commercial theaters and movie houses already pay the gross receipts tax, but the increase could hurt business, said Russ Nunley, vice president for marketing and communications for Regal Entertainment Group, which operates Wilmington's Mayfaire 16 Cinemas.</p><p>"Any time you talk about raising a tax on entertainment, there's going to be an impact," Nunley said. </p><p>If ticket prices go up, he added, more people might choose to stay home, cutting sales and leaving little or no new state revenue, he added.</p><p>"Any tax increases in these economic times will pose a hardship on working families," said Terry Bryant of the Museum of Coastal Carolina at Ocean Isle Beach. At this point, Bryant has no idea what impact the tax would have on her museum and its sister attraction, Ingram Planetarium at Sunset Beach.</p><p>Thalian Hall already pays state sales taxes on its food and beverage concessions and on souvenir sales, Rivenbark said. </p><p>"The overall thought was how we could raise money," said State Rep. Ted Davis, R-New Hanover. Davis voted for House Bill 998, which included the new tax, but said he is unfamiliar with its specific provisions. </p><p>"This was just an enormous piece of legislation with many, many sections," he said.</p><p>"The idea was to spread the tax base around," said Rep. Rick Catlin, R-New Hanover, who also voted for House Bill 998. Like Davis, he was not on any of the committees involved in the negotiations on the tax.</p><p>"At the end of the session, you're moving at the speed of light," he said. "If you're not on one of the committees, you're kind of out of the loop."</p><p>Rep. Suzi Hamilton, a Democrat who represents parts of New Hanover and Brunswick counties, voted against the bill. State senators Thom Goolsby of New Hanover and Bill Rabon of Brunswick, both Republicans, voted for the bill in the Senate.</p><p>The new tax law leaves a number of questions unanswered, Wells said. For example, would local sales taxes also be applied to tickets and passes, along with the state tax?</p><p>Wells expects the ticket tax might be revisited in the fall. Already, she said, some legislators are talking about "unintended consequences" of the act.</p><p>"It's not over," Wells said. "We expect there's going to be a lot of conversation about this."</p><p><i></p><p><a href="http://www.starnewsonline.com/section/topic14"><b>Ben Steelman</b></a>: 343-2208</i></p>